TMI Blog2015 (1) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... the alternate remedy under the Act - the preliminary objection raised by the Additional Government Pleader with regard to maintainability is rejected. Reversal of Input Tax Credit u/s 19(13) of the VAT Act - Defects noted by Revenue on verification of returns filed – Held that:- In Althaf Shoes (P) Ltd. Versus Assistant Commissioner (CT), Valluvarkottam Assessment Circle, Chennai-6 [2011 (10) TMI 567 - Madras High Court] it has been held that the circular issued by the Commissioner clearly states that so long as the vendor is found to be a registered dealer on the files of the Revenue, the claim of the assessee for refund could not be rejected nor delayed - so long as the purchasing dealer has complied with the requirements as given under Rule 10(2), the claim of the purchasing dealer cannot, by any length of reasoning, be denied by the Revenue – thus, the ITC availed by the petitioner could not have been proposed to be reversed or reversed on the grounds stated by the respondent, i.e., the selling dealer has not filed returns or not paid taxes or they were unregistered dealers or their registrations were retrospectively cancelled - the exercise of the jurisdiction by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken credit (termed as non assessee vendors), though assessment orders mentions the existing TIN Nos. of the vendors at ₹ 79,460/-; (iv) The vendors are unregistered dealers and evaded tax to the tune of ₹ 34,73,089/-. 5. On the above allegations, the respondent proposed to reverse the ITC of ₹ 3,73,69,631/-, availed by the petitioner, as per Section 19 (13) of the VAT Act. The petitioner was given liberty to file objections to the proposal made in the notice, dated 20.07.2012, in writing, with connected records, within ten days from the date of receipt of the order. 6. The petitioner submitted its reply, dated 05.08.2012, stating that they were in possession of valid tax invoice; vendors are registered dealers within the state of Tamil Nadu; credit was taken only on local purchase on the basis of tax invoices issued by local registered dealers; Section 19 (13) of the Act had no applicability to a case, where credit had been taken on the basis of valid tax invoice. Without prejudice to the above contentions, the petitioner stated that they were in the process of obtaining confirmation from the vendors and that returns were filed and tax discharged at their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and the respondent failed to follow the procedures set-out in Circular, dated 20.04.2001. In support of the said contention, the learned counsel for the petitioner placed reliance on the decisions of this Court, in the case of Althaf Shoes (P) Ltd., v. Assistant Commissioner (CT), Valluvarkottam Assessment Circle, Chennai reported in (2012) 50 VST 179 (Mad) and Sri Vinayaga Agencies v. Assistant Commissioner (CT), Vadapalani-I Assessment Circle, Chennai and another reported in (2013) 60 VST 283 (Mad). 10. The learned Additional Government Pleader appearing for the respondent raised a preliminary objection regarding the maintainability of the writ petition, contending that the petitioner should be directed to file an appeal before the Appellate Authority, in terms of Section 51 of the VAT Act and in support of such contention, reliance was placed on the decision of the Hon'ble Supreme Court, in the case of Union of India v. Tata Engineering and Locomotives Ltd., reported in AIR 1988 SC 287. On the merits of the assessment, the learned Additional Government Pleader contended that the petitioner has effected local purchases from the local dealers and availed ITC, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been reiterated in the reply affidavit. Further, it is stated that the confirmation certificates given by the vendors confirming payment of tax have been produced before the authority along with their reply dated 10.10.2012, which have not been taken into consideration. 13. I have heard the submissions made by the learned counsel for both sides and perused the materials available on record. 14. The preliminary objection, raised by the learned Additional Government Pleader appearing for the respondent, is with regard to the maintainability of the writ petition. It is his further contention that under Section 51 of the Act, the petitioner has got an effective alternative remedy of appeal and without exhausting the same, the petitioner cannot maintain the writ petition. But, on the other hand, the petitioner contended that the impugned order of assessment is an outcome of total non-application of mind, failure to afford reasonable and effective opportunity to the petitioner and refusing to accede to the request made by the petitioner for assistance from the Department for reconciliation / verification of the vendors' details / tax payment. That the confirmation letters giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hony Ltd., M/s.Karbon Mobiles, M/s.Optimimus Infracom Limited, etc., Subsequently, another representation, dated 15.01.2013, was sent by the petitioner, reiterating its earlier stand, requesting for details regarding the mismatch among other things. Even thereafter, the copies of the tax invoices issued by M/s.Sony India Pvt. Ltd., M/s.PE Electronics, M/s.Cyberstar Infocon (P) Ltd., M/s.Whirlpool India Limited and the certificate of registration under the VAT Act of M/s.Sony India Ltd., and website information of registration of Whirlpool India Limited were produced. Inspite of all these communications and documents, the respondent, in the impugned proceedings, has stated that the objections filed by the petitioner were examined and held that the petitioner has not filed any documentary evidence in support of their contention and in the absence of any documents, the objections could not be verified and therefore, the objections filed by the petitioner are overruled and the proposal in the notice, dated 20.07.2012, is confirmed. 18. Thus, it is evidently clear that the respondent failed to apply his mind to the submissions made by the petitioner and the documents produced. The im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Althaf Shoes (Pvt) Ltd., cited supra, the petitioner was a dealer and exporter of finished leather and other products, who claimed refund of ITC under Section 18 (2) of the VAT Act in respect of the exports made. Though the refund was granted, subsequently notice was issued seeking to withdraw the relief on the ground that its dealer had not reported the sales turnover and remitted tax and an order was passed, withdrawing the relief granted and levying penalty. While considering the said case, it was held that the circular issued by the Commissioner clearly states that so long as the vendor is found to be a registered dealer on the files of the Revenue, the claim of the assessee for refund could not be rejected nor delayed. Revenue in the said case did not deny, as a matter of fact, that the assessee s vendors are all registered dealers on the files of the Revenue and the assessee had also given the TIN number of these vendors. When such particulars are available, it is for the Revenue to take necessary action against the vendors, who had not remitted tax collected by them to the State. Without taking recourse to that, the Revenue could not deny the claim of the assessee. Going by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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